Reformers turn to elections to clean up co-op energy

Efforts to reform the recalcitrant Intermountain Rural Electric Association, the state’s largest energy cooperative, are clearly taking a more subtle tack this legislative session. Instead of directly seeking, for example, to mandate energy efficiency and conservation, a Boulder lawmaker and renewable energy advocates are looking to change the way co-op board members are elected.

Rep. Claire Levy (D-Boulder) told the Colorado Independent last week she will introduce a bill in the session beginning Jan. 13 that will seek to impose greater transparency and accountability in rural electric co-op board elections in order to even the playing field for challengers.

She didn’t name the IREA as the impetus, but it’s evident that allegations of election irregularities leveled by supporters of three green challengers in the co-op’s board election last spring at least in part prompted Levy’s latest proposed bill. All three challengers came up short in an election some say was rigged to favor the incumbents.

But last legislative session Levy also tried to pass a bill that would have required member-owned electric co-ops with more than 100,000 customers to use energy efficiency and conservation programs to save electricity equal to 2 percent of 2008 sales by 2012 and up to 10 percent by 2020.

The IREA, now with more than 138,000 customers in parts of 10 counties along the Front Range between Denver and Colorado Springs, is the only one of the state’s 22 co-ops that would have been affected. The other 21 co-ops have fewer than 100,000 members.

A softer approach to clean power

Mike Kempe, a scientist with the National Renewable Energy Laboratory in Golden and thus far the only green candidate able to land on the IREA board, said he supports the election transparency bill but not an efficiency and conservation mandate.

“Of course I support energy conservation,” Kempe said. “However, do you want to force a co-op that’s unwilling to do so to take money from its members and then require them to give it back? You’re forcing someone to do something they don’t want to do and making them tax people to do so, essentially, and that just doesn’t make sense.”

Kempe said a more sensible approach would be a bill funding efficiency education programs, informing members that certain conservation measures will save them money in the long run. Or better yet, he said legislating tougher building codes requiring energy efficiency would result in even bigger savings.

But Kempe remains an outcast on the IREA board of directors. On the co-op’s website homepage a headline still touts last April’s election results: “IREA incumbent directors handily defeat challengers,” and the accompanying press release (pdf) declares, “Again, the IREA member/consumers have given overwhelming support to the six out of seven directors who are committed to providing the best possible service at the lowest possible cost …”

News headlines like “Renewable energy sticker shock,” and “Prominent climate scientists discredited by Climate-gate,” and “Cap & trade could condemn us to serfdom and poverty” also scroll across the IREA homepage.

Reformers like Kempe and the three unsuccessful challengers in last spring’s election, however, say they merely want more balance in the co-op’s base-load power supply, an improvement on the approximately 93 percent provided by Xcel Energy, mostly in the form of coal and natural gas, with only about 7 percent coming from the old-school renewable source of hydroelectric.

Co-op or corporate electricity

Part of the problem with the IREA, Kempe says, is that it’s gotten so big with the expansion of Front Range suburbia that most members just think they get their power from Xcel, an investor-owned utility with state oversight conducted by the Colorado Public Utilities Commission.

Xcel is operating under a 20-percent renewable mandate by 2020, while member-owned co-ops only need to meet a 10-percent renewable standard by that date. That makes board elections all the more vital, Kempe contends.

“Most co-ops are very rural, so the people understand what a co-op is, but with the IREA, Denver has expanded out into it and people think of it as just another Xcel,” Kempe said. “They don’t realize that it’s not regulated by the PUC and it’s regulated by them, the member-owners.”

IREA public affairs director William Schroeder, a former Republican state senator from Morrison, contends it’s the current crop of lawmakers who don’t understand how co-ops work.

“We don’t get a rate of return,” Schroeder said of the difference between member-owned and investor-owned utilities. “If we do a good job and make more money than was anticipated in our budget and our margins, that money goes back to our customers in capital credits. Xcel doesn’t give you anything back, it goes to their investors. Well, our customers are our investors.

“They are the ones that we have to answer to; we don’t have to answer to a board, and I find that a lot of legislators don’t understand that.”

Delivering energy against the current

Schroeder seems resigned to the possibility of another bill seeking to mandate efficiency, conservation and more renewables.

“There’s a few people such as Rep. Levy who have been very direct in trying to raise energy costs, and we’re very vocal about that, and I think those are the reasons that that type of legislation is being introduced,” Schroeder said.

He also still bristles at the fact that IREA members in 2005 voted 80 to 20 percent to opt out of 2004’s statewide Amendment 37, which required 10 percent renewable energy by 2020, only to see the state legislature in 2007 require an additional 10 percent from Xcel and require 10 percent renewable electricity for all rural co-ops by 2020.

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About the Author

David O. Williams

is an award-winning reporter who has covered energy, environmental and political issues for years. His work has appeared in the New York Times, Chicago Tribune and Denver Post. He's founder of Real Vail
and Real Aspen.

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